This year marks the 75th anniversary of the founding of the People’s Republic of China (PRC). The establishment of ‘New China’ was officially proclaimed in a mass ceremony held in Beijing’s Tiananmen Square on October 1, 1949, in the midst of a civil war that had not yet fully ended, and under the threat of bombardment by the reactionary Nationalist forces of Chiang Kai-shek.[1] At the time of its founding, even Mao Zedong, the acknowledged leader of the revolution, was not optimistic whether the rest of the world would recognize this “new socialist state.”[2]
By the early 1950s, China was a country in a shambles, lagging behind even most of the other poor, underdeveloped nations in terms of many economic as well as human development indicators. Its population was predominantly rural and illiterate, and its labor force was mostly unskilled and unhealthy. Although China’s arable land was traditionally infertile and scarce, its economy was based largely on agriculture and it lacked a modern industrial base.[3] In the period beginning with the First Opium War (1839-42), which the Chinese often call ‘the Century of National Humiliation’ (百年国耻 bainian guochi), the country was invaded and occupied many times by the foreign powers. What the endless wars, civil wars, rebellions and famines had left was a society crushed under the weight of the ‘three big mountains,’ i.e. imperialism, feudalism and bureaucratic capitalism, in Mao’s words. So underdeveloped was China in those years that its industrial production per capita was only 1/90th of that of tiny Belgium.[4] It should come as no surprise that, in the early years of the People’s Republic, some members of the American élite were convinced that the Communist Party of China (CPC) would fail to feed the Chinese people, no matter what.[5]
This picture completely changed in just a few decades. As C. P. Fitzgerald, a prominent British China historian of the 20th century, wrote, with the overthrow of the corrupt and decrepit Nationalist régime in 1949, the “weak and divided” China was gradually replaced by a “strong unitary state, in complete military and civil control of every part of the mainland territory, with a powerful central government, an honest administration, and a well-disciplined effective army.” This new state built a “strong and independent” nation by suppressing disorder, abolishing corruption, giving peace to the country, and stabilizing the currency.[6] The economic, social, political and cultural transformation that the PRC experienced over the first three decades after its establishment in 1949 was, as most China scholars, regardless of their attitude towards the then CPC’s rule, substantially agree, enormous and in many ways unique. On the eve of its market-oriented transformation, China was no longer the ‘sick man of East Asia’ or – to use Mao’s terms – a ‘semi-colonial and semi-feudal society’. Although the dominant discourse today is that China’s development as a whole was initiated by market-oriented reforms, even a World Bank study from the early 1980s, which was by no means pro-socialist, suggested that both economic and human development were stunning in the early decades of the PRC.[7]
In the official discourse of the post-Mao CPC, each event in the history of ‘New China’ is treated as an interlocking piece of a jigsaw puzzle, and the pieces that do not fit into the puzzle are often swept under the rug. A cartoon strip-style story published on the official WeChat account of People’s Daily on July 1, 2021 is a clear example of this historiographical approach. This so-called “pictorial handbook” (图鉴 tujian) was intended to provide a panoramic view of the CPC’s hundred-year history. However, some significant milestones of this history were deliberately omitted. Mass mobilization campaigns in Mao’s China, for instance, were not even mentioned, as if they had never happened. In the “pictorial handbook”, post-1949 Chinese history was depicted as a period characterized merely by a series of economic, technological, scientific, military and diplomatic successes achieved by a harmonious, integrated nation united willingly under the leadership of an almost omnipotent and omniscient Party-state.[8]
Contrary to this narrative, however, the 75-year history of the PRC cannot simply be considered as a continuity without rupture.[9] The 1976 coup, which resulted in the purge of Mao’s radical followers, and the subsequent ‘Reform and Opening-up’ policy announced in late 1978, marked a major turning point in contemporary Chinese history, just as in 1949. China’s reintegration into the capitalist world market from the end of the 1970s in truth provided temporary relief to the capitalist-imperialist world economy, which was then struggling in a serious structural crisis. China’s emergence on the scene as the ‘factory of the world’ with its countless export-oriented, labor-intensive sweatshops and as a vast market of consumers was indeed a boon for Western monopoly capital. Had the so-called ‘Chinese miracle’ been limited to this, it would have been tolerable for the imperialists. But China did not stop there; instead, it increasingly evolved into a rival and, thus, a nuisance.
When the market-oriented transformation began, China was still a developing country, albeit one with some very significant advantages compared to many others in Asia, Africa and Latin America. Over the last couple of decades, market-oriented ‘structural adjustments’ have either transformed many developing countries into neocolonies/semi-colonies or reinforced their status as such. In the case of China, the situation is different. While there are perfectly plausible reasons why China can still be considered, in Xi Jinping’s words, “a member of the big family of developing countries”,[10] it is not at all realistic to say that it is a ‘neocolony’/‘semi-colony’ of Western monopoly capital. China today is more of an independent great power (or even a strong candidate for superpower status, yearning for “a more central role in global affairs” according to some analysts[11]). As argued by a renowned China pundit – and also a US military officer – in a recent study, while “[t]he idea that China could challenge the United States economically, globally, and militarily was unfathomable” just a few decades ago, “the relative power” between the two countries “had narrowed significantly, with China pulling ahead in some cases” over the past years.[12]
According to the official statistics, in market exchange rate terms, the share of China’s gross domestic product (GDP) in the global economy increased from 11.3% in 2012 to 18.5% in 2021.[13] (Yet, it should be noted here that China’s per capita GDP, however rapidly it has increased, still lags far behind that of the advanced capitalist nations.[14]) As of 2021, China was the world’s second-largest economy, the second-largest consumer market, the top manufacturer, the top trader, and the country with the largest foreign exchange reserves.[15]
In its national strategic plan “Made in China 2025” (MIC25), the PRC State Council set the goal for China to become a technologically self-reliant nation and a “manufacturing great power” (制造强国 zhizao qiangguo) with a large capacity for innovation, high resource utilization efficiency, and deep integration of informatization and industrialization.[16] It is clear that China has already made a significant progress towards this goal. Between 2012 and 2017 alone, China’s spending on research and development (R&D) increased by 70%, surpassing the average for the first 15 EU countries as a share of the GDP.[17] By the year 2022, China’s total expenditure on R&D had already exceeded 3 trillion RMB – a 10% increase compared to the previous year[18] – and if it continues to increase at this rate, it is expected to overtake the US in the near future.[19]
Although post-‘reform’ China was dependent, until recently, on foreign direct investment (FDI) and technology imports for high-tech production,[20] it is now openly recognized as a “scientific superpower” in leading Western mainstream publications, and it is admitted that it may soon put an end to the absolute dominance of the US in the field of technology.[21] A report recently published by Australian Strategic Policy Institute (ASPI), which assesses a country’s scientific and technological performance and competitiveness based on the amount of “high-impact” research publications it produces, reveals that the US was the leader in the research of 60 out of 64 “critical technologies” and China was leading in only 3 between the years 2003-2007. Today, China holds the top spot in 57 fields, while the US leads in only the remaining 7.[22] This leap is by no means accidental and relies heavily on China’s ‘skilled’ labor force: In 2022, China had 6.354 million full-time equivalent R&D personnel (almost a twofold increase compared to a decade ago), creating the world’s largest stock of scientific and technological talent.[23]
But perhaps more importantly, China is now developing some significant competitors to the main pillars of the so-called ‘liberal international order’, namely the US-controlled international financial institutions (IFIs). The US-controlled IFIs emerged after World War II, and were further consolidated by neoliberal restructuring, especially after the end of the Cold War. As the crisis of global economic governance dominated by what Peet calls the “Unholy Trinity” – namely the IMF, World Bank and WTO[24] – deepens, China has been creating new financial mechanisms without directly challenging capitalist globalization and the existing market system. Institutions such as the Asian Infrastructure Investment Bank (AIIB) and the Silk Road Fund (SRF) not only aim to mobilize the resources needed to carry out the infrastructure-oriented projects of the Belt and Road Initiative (BRI), which will secure China’s access to natural resources worldwide and open up new export and investment opportunities for Chinese capital, but also demonstrate the fact that China now has enough resources as well as audaciousness to challenge – and even be a counterweight to – US hegemony in the global system of finance and trade. This is in line with China’s long-term strategy to establish a “new global financial order”.[25] Today, China’s official media outlets are outspoken enough to publish op-eds suggesting that China is now “actively and urgently” exploring alternatives in order to build a “new, fairer, equitable, and reasonable” international order, as a response to the “gradual demise” of the US-led, liberal one.[26]
Talk of the ‘China threat’ has proliferated in the West in recent years, often with racist overtones. This has been further fueled by the most recent ‘peak China’ narrative, which suggests China’s development has already peaked and is in decline, as a result of which the CPC leadership may go to any lengths, including military measures, to avoid a possible collapse.[27] It would be naïve to think that such talk is unrelated to the rapidly-increasing competitiveness of China’s state and private capital vis-à-vis Western monopoly capitalist corporations.
A Myth to be Debunked: Market as a ‘Magic Wand’
As briefly mentioned above, today, the conventional narrative, both in China and in the West, tends to associate the so-called ‘Chinese miracle’ with the “one-sided theory of ‘developmentalism’”[28] or “GDPism”[29] of the post-Mao era. This sees the development of the productive forces and rapid economic growth as the key to solving all societal problems. A second tendency, sometimes combined with the first, links this ‘miracle’ to the post-Mao national project of state-led gradual, yet sustained, marketization based on the dictum – often inaccurately attributed to Deng Xiaoping – of ‘crossing the river by touching the stones’ (摸着石头过河 mozhe shitou guohe) instead of the neoliberal ‘shock therapy’ practised on countries in the former ‘Soviet orbit’. It is not uncommon for some Chinese scholars of Marxism and CPC theorists to refer to the Mao era as a period of “poverty socialism” (贫穷社会主义 pinqiong shehuizhuyi). They claim that China was weak and the Chinese people were poor under Mao, and argue that the superiority of socialism over capitalism was limited to the realm of propaganda till the ‘Reform and Opening-up’ policy was initiated.[30]
Scholars who treat the ‘market’ itself as a ‘magic wand’ and downplay the achievements of Maoist policies overlook the role that precisely the legacies of independence (or “delinking”, to use Samir Amin’s terminology[31]) and socialism, as intertwined elements, have played in making China what it is today. This is not a plea to be ‘generous’ enough to give Maoist China some credit for the ‘miracle’ of present-day China; socialist policies do not need to be reluctantly and halfheartedly advocated in this way. Rather, we argue that it was only the socialist-era ‘delinking’ from world imperialism, and the building of a socialist foundation, that allowed China to develop upon ‘relinking’. In the absence of that, not even independent capitalist development is open to an underdeveloped country.
To elaborate: since the mid-1970s, many ‘developing countries’ have undergone various types of market-oriented ‘structural adjustment’. At the time of the announcement of the ‘Reform and Opening-up’ policy in the late 1970s, China was not the only country with a relatively cheap and abundant labor force – an essential factor to attract FDI. But all the other ‘models’, whether of ‘free-market fundamentalism’ or the ‘developmental state’, that had once been presented as ‘success stories’ by IFIs, have failed one after another.[32] Only the so-called ‘China model’ remains a topic of interest and debate.
Why is that? Engst gives a simple and plausible answer to this question:
“The only reason that China was able to rise is because in the era of imperialism it maintained its sovereignty. The economic base built in Mao’s era laid the foundation for a sovereign capitalist development. … China’s relative economic success after Reform, compared to other Third World countries, is because it has sovereignty. It has an industrial base. It decides the sectors in which multinationals are allowed to operate. … So, having a coherent, indigenous, all-around economic base is the key for China to re-emerge in the capitalist world and become a rising industrial power. In absence of this, neoliberal policies destroy Third World countries.”[33]
Both within and outside China, the Mao era has long been charged with undermining economic development by excessive politicization of the popular masses and implementing ‘irrational’ or ‘utopian’ economic policies that caused devastation. Bramall’s various studies provide empirical evidence that, contrary to the conventional narrative, post-Mao economic growth in China was only possible on the basis of the skills and infrastructure developed during the Mao era; also, thanks to the policies implemented during the Mao period, both rural and urban industries developed rapidly and relatively steadily in many parts of China. There is no doubt that at the time of the launch of Reform and Opening-up (1978), China was still not an industrialized country. Yet, under Mao, China had to begin building a new foundation on the ruins left by the pre-revolutionary turmoil. Then, because of the national security threat it faced for rejecting pax Americana (and later for defying the line of the Soviet Union and its camp), China was forced to invest in non-productive and often inefficient defense-oriented heavy industries, slowing down the improvement of the material living conditions of its population. In this respect, it is not surprising that the later ‘Chinese miracle’ coincided with a period of rapid normalization of China’s relations with advanced capitalist countries, above all the US. For it allowed a shift in investment from the defense industry to civilian sectors producing consumer goods, and for an increase in the share of consumption in China’s national income. Overall, Bramall’s detailed work underlines that the industrial capital created, the vast transportation network and infrastructure built, the massive investments made in land and water conservation, the skilled labor force trained and the experience gained during the Maoist era, which Bramall calls “a process of learning-by-doing”, gave China a great advantage during the Reform and Opening-up years and made the acceleration of growth possible.[34]
Under Mao, significant progress was made not only in terms of industrial development but also in terms of agricultural modernization. Immediately after the founding of the People’s Republic, China, as an underdeveloped and impoverished country, had only agricultural surplus to rely and draw on to create the primitive capital accumulation required for industrialization. Mao’s well-known criticism of the “lop-sided stress on heavy industry to the neglect of agriculture and light industry” should be seen in this context.[35] Through land reform and collectivization of agriculture, the revolutionary state in China built a foundation for the collective and more efficient use of very scarce resources by peasants, thus increasing agricultural output and the amount of surplus available for industrialization. The development of industrial sector, in turn, enabled the production of more sophisticated agricultural and agro-industrial inputs (agricultural machinery, electric generators, irrigation equipment, pesticides, chemical fertilizers, etc.) for production and processing. All this, combined with the reduction of agricultural taxes in parallel with economic development, the gradual increase in central government’s aid to the countryside, and the organization of mass mobilization campaigns as well as extensive land and infrastructure developments (terracing of land, building irrigation and drainage systems, reservoirs, canals, wells, pumping stations, etc.) under the People’s Communes, increased land productivity and greatly modernized agricultural production.[36] Between 1957 and 1979, tractor-plowed area (as a percentage of cultivated land) increased from 2.4% to 42.4%, and the land irrigated by electricity (as a percentage of total irrigated land) increased from 4.4% to 56.3%. Grain production increased from 181 million tons in 1952 to 285 million tons in 1977.[37] In 1960s, rural China had already begun to industrialize with the establishment under the local authorities of thousands of small industries, which “produce and repair farm implements and machinery; produce fertilizers, consumer goods, insecticides, building materials, and rural transportation equipment; process agricultural products; and develop power sources”.[38]
It is worth citing here what the World Bank’s 1981 study said of China’s industrialization:
“Industrialization has been very rapid, largely as the result of an unusually high rate of investment, virtually all of which has been financed by domestic savings. The share of industry in GDP (around 40%) is currently similar to the average for middle-income developing countries. … Special efforts have been made to spread manufacturing into remote regions and rural areas. … Almost the entire range of modern industries has been built up, but with particular emphasis on those making capital equipment. … [T]he share of machinery and metal products is not much smaller than in the industrialized market economies. … As a result, China is now largely self-sufficient in capital goods (less than 10% are imported). … Despite this strong bias toward heavy industry, per capita availability of manufactured consumer goods has also expanded rapidly – at 7% p.a. in 1952-79.”[39]
To be sure, Maoist China was not a wealthy country where people lived in prosperity. Food and clothing were scarce and remained so throughout the years. This fact is also openly acknowledged by authors who have a favorable view of the Mao era.[40] Nevertheless, the label of ‘poverty socialism’ popularized in the post-Mao era is utterly shallow. It would be unrealistic to expect everything to change instantly in a country that was newly founded in the wake of major disasters, economically and technologically backward and, moreover, under an imperialist embargo and blockade. Rather, the Maoist era achieved a remarkable recovery, in which many breakthroughs were made that raised the living standards of existing and future generations.[41] As Deng himself once noted, by the early 1980s China had essentially solved its food and clothing problem and had become self-sufficient in grain[42] – huge advances for a Third World country.
It is banal to simply compare the wealth of present-day China with that of the Maoist period, as nearly five decades have elapsed since then. Counterfactual exercises are difficult and can be highly subjective. What can be asserted is that China was experiencing rapid development and improvement of conditions under Maoist socialism, and further development on that trajectory too may have brought great wealth, although of a very different type. As of the early 2000s, some Chinese even felt that, if Maoist policies had continued, China would have achieved the same standards of living without such degeneration of “societal habits and customs.”[43]
Maoist China’s success in human development was, in essence, the success of socialism. The living conditions of the broad mass of people during the Maoist period were significantly improved by two policies: Firstly, the policy of “industrial citizenship” offered to the urban working class under the “work unit” (单位 danwei) system consisted of broad economic rights, referred to as the “iron rice bowl” (铁饭碗 tiefanwan), including job security, virtually-free education and health care, subsidized food and housing, etc., as well as partial political rights.[44] Secondly, the rapid development of public services, above all, education, health care and culture, for the rural population under the People’s Commune system,[45] even though not always of very high-quality. As highlighted in a study prepared for the World Bank, under Mao, many of the infectious diseases that had plagued the Chinese population in the past were eradicated; a public health system and infrastructure that “in many ways seemed ideally suited to the needs of a capital-poor, predominantly agrarian economy” was developed; life expectancy increased from under 40 years to 68 years nationwide; infant mortality rates were reduced from more than 200 per 1,000 to barely 12 in urban and less than 60 in rural areas; and (although in the case of Chinese the criteria are quite complicated) the literacy rate was pushed from around 20% to almost 70% in just three decades.[46] Even the Nobel-winning economist Amartya Sen, in a study co-authored with Jean Drèze, argued that the progress made in health care and education during the Maoist period – regardless of Mao’s own intentions – directly contributed to China’s economic performance after the market-oriented transformation, and that this was a major reason for the widening gap in living standards between China and India in just a few decades.[47]
Furthermore, it is noteworthy that many public services and basic necessities provided free during the Maoist period, which directly affected the well-being of people, may be undervalued in subsequent GDP calculations because they were not treated as commodities provided through the market.[48] In this respect, it is misleading to evaluate China’s economic performance in the pre- and post-Reform period solely on the basis of GDP growth. In a similar vein, the argument that 800 million Chinese have been lifted out of poverty in the past 40 years simultaneously with the market-oriented transformation should also be treated with some skepticism. After all, this narrative relies on the World Bank’s ‘absolute poverty line’ approach.[49] As the World Bank’s present poverty metric is based exclusively on monetary ‘income’ (defined in purchasing power parity [PPP] terms), it fails to take into account non-monetized factors such as subsidies and free public services. Thus the broad masses of people in Maoist China, whose living standards improved and access to basic necessities became easier and more secure, are now classified as “extremely poor” in retrospect, with more than eight out of ten termed undernourished or on the verge of starvation.[50] Given the huge improvements in health and education in China in the 1960s and 1970s, it is highly misleading to linearly transpose the current metrics into the past and argue that human development in China only gained momentum with marketization and privatization.[51] On the contrary, recent studies based on different measurements than the World Bank’s PPP-based ‘international poverty line’ (IPL), argue extreme poverty in China worsened in the post-Mao period with the deepening of market-oriented reforms in the 1990s, and only partially recovered in the 2000s.[52] Well before it devised its international poverty line, the same World Bank said the following in its 1981 report on China:
“China’s most remarkable achievement during the past three decades [since 1949] has been to make low-income groups far better off in terms of basic needs than their counterparts in most other poor countries. They all have work; their food supply is guaranteed through a mixture of state rationing and collective self-insurance; most of their children are not only at school, but being comparatively well taught; and the great majority have access to basic health care and family planning services. Life expectancy – whose dependence on many other economic and social variables makes it probably the best single indicator of the extent of real poverty in a country – is (at 64 years) outstandingly high for a country at China’s per capita income level.”[53]
All in all, in the first 30 years after the establishment of the People’s Republic, China built an independent industrial base despite the enormous difficulties the country faced, and created a healthy and educated labor force that would later provide a huge advantage to private investors, both domestic and foreign, by enabling relatively low-cost reproduction of labor power. In other words, “[t]he fundamental national, social, and physical as well as human infrastructure had been transformed earlier, before jiegui (global integration) or reform and opening”.[54] This is the historical background that distinguishes China from other developing countries that underwent market-oriented transformation at a similar time, paving the way for what is now referred to as the ‘Chinese miracle’. As Amin points out, China owes its ability to remain outside of “financial globalization” and to benefit from foreign investments for technology transfer while reintegrating into the capitalist-imperialist world economy in the post-Mao era mainly to this “Maoist construction”.[55]
A Controversial Path: From Socialist Construction to Capitalist Expansion
Here, an important question arises: So what has been built on the foundations laid by the ‘Maoist construction’ in China over the past 40-plus years of ‘Reform and Opening-up’? To put it another way, where exactly does China fit in the capitalist-imperialist world economy today? Is it a socialist country, a country retaining the potential to ‘return’ to socialism, or is it already a capitalist country? Is it a new, rising imperialist power or a semi-colony? Oppressor or oppressed? Is it an underdeveloped, developing, or developed country? Or, to use the terminology of the World-Systems Theory, is it on the periphery, on the semi-periphery or in the core? These are some of the questions that have come up most frequently in recent theoretical debates about China within critical and left-wing political, academic and intellectual circles.
Until recently, China was known as the number one production and assembly center for goods developed and designed by multinational corporations (MNCs). As briefly mentioned above, China was endowed with a cheap, massive and, thanks to Mao-era policies, much healthier and better trained (and thus relatively inexpensive in terms of labor power’s reproduction) labor force compared to the other low-income countries. Together with the industrial base established under Mao, this made China an attractive investment destination for foreign capital in post-Mao era. Annual net FDI inflows into China increased from USD 1 billion in 1985 to more than USD 50 billion by 2002, and even in the times of crisis when global flows of FDI stagnated, inflows into China continued to expand.[56] While the contribution of FDI to the development of productive forces in China during the Reform and Opening-up is often exaggerated in the mainstream liberal literature, which tends to downplay the significance of the independent industrial base established in the pre-Reform era,[57] there is no denying the fact that it has played an important role in China’s technology transfer, export boom and, hence, rapid GDP growth.[58]
Despite the recent downward trend in its FDI inflows, China remains one of the largest FDI recipients in the world.[59] Yet, the picture painted above has changed considerably, especially since the 2008 financial and economic crisis. Between 2010 and 2016 alone, China’s outward direct investments (ODI) almost tripled, while inward FDI increased by only 15%.[60] Since 2015, when China became a net capital exporter for the first time, outflows of Chinese investments abroad have mostly outpaced inflows of FDI into China.[61] Today, China is not only one of the largest host economies for FDI, but also one of the top sources of FDI on a global scale.[62]
According to Lenin, “the division of the world among the international trusts” was one of the defining features of monopoly capitalism.[63] Today, the most powerful monopolies of the capitalist-imperialist system can be found on the ‘Global 500’ list updated annually by Fortune magazine. In 2000, 86% of the MNCs on the Global 500 list were from the US, EU and Japan (the ‘Triad’), which make up the dominant imperialist bloc. China, on the other hand, had zero companies on the list in 1991 and only 12 in 2000.[64] The number of Chinese companies on the Global 500 list has increased almost steadily over the past years, reaching 133 by 2024. Three of the top 10 and 29 of the top 100 are now Chinese companies.[65] However, most of the Chinese companies on the list are state-owned enterprises (SOEs) (74%), unlike the MNCs from the ‘Triad’.[66] Although the share of private companies in China’s outward investment has increased significantly over the past two decades, in this respect, the Chinese public sector still leads the way.[67]
The role of SOEs in the Chinese economy in general,[68] and in China’s outward investments in particular, is one of the main reference points of scholars and writers who argue that China is still socialist, or at least open to socialism. Roberts, for instance, points out that in China public ownership in the means of production is dominant in a way that it is not in any major capitalist economy, that the banking sector is strictly controlled by the state, and that the CPC infiltrates industrial activity through party branches at all levels, all of which – while they do not correspond to socialist relations per se – provide at least “possible conditions for the re-emergence of [socialist] relations”.[69] Boer, too, notes that the public sector remains the mainstay of China’s socialist system and that the Party, through its branch organizations, ensures that both public and private enterprises fulfill their “social responsibilities”.[70] Losurdo, on the other hand, goes a step further by emphasizing that capitalists in China are not only under the control of the “state apparatus” but are often driven by “ideology”. According to him, many new Chinese capitalists, even if they are not communists, are “patriotic”, share the CPC’s vision of the “[great] rejuvenation of the Chinese nation” and thus support communist rule, relatively independently of their economic interests.[71]
As is well known, the ‘export of capital’ is an important element of the Leninist theory of imperialism. Therefore, it is not surprising that some authors who attribute a ‘non-’ or even ‘anti-imperialist’ character to China’s capital exports begin by criticizing Lenin’s analysis.[72] On the other hand, among the authors who argue that a different theoretical “toolbox” than “Lenin’s analysis of classical imperialism” is needed to clarify China’s “geopolitical role” today, there are also those who do not necessarily attribute a positive role to China’s capital exports. Katz, for example, recognizes that China has been establishing unequal trade relations with developing countries, putting them into debt and extracting surplus value from them through its firms investing abroad. However, while this proves that China has established strong ties with global capitalism, it is not enough to say that it is a new “imperialist power”. This is because China’s economic expansion does not go hand in hand with military aggression, unlike the imperialist states, especially the US. According to him, “China’s capitalists are not accustomed to calling on the political-military intervention of their state when they confront difficulties in their international businesses,” because the state apparatus in China is not directly controlled by the ruling class, but by the CPC, which pursues a defensive and prudent foreign policy. For Katz, “economic exploitation” alone cannot be equated with “imperial domination or colonial invasion”: Rather, what defines “an imperial profile” is not “economic parameters”, but “international acts of domination”. The most appropriate description of China today is therefore “neither imperialist nor part of the Global South”.[73]
Li and Kotz, like Katz, distinguish between the ‘capitalist class’ and the ‘state apparatus’ in China , yet come to a different conclusion about the nature of China’s outward investments. Defining imperialism as “the economic and political domination of one country by the ruling class of another aimed at extracting economic benefits for that ruling class”, the authors emphasize that capitalist corporations alone are not capable of establishing “a position of domination in other countries”. It is the “imperialist power’s state” as an instrument of coercion that imposes this relationship. However, while the “economic structure” in China today is capitalist, the state is not. Li and Kotz point out that, as Marx had put it, “in certain historical moments the state can be relatively independent of the capitalist class”. Thus, what has been happening in China is that the capitalist economy is being developed by a political party led by a “self-perpetuating leadership group” who have economic -and especially national- development goals beyond profit maximization. Chinese capitalists, like the capitalists elsewhere, may have imperialist impulses, but unless the CPC leadership is directly controlled by this class, China is unlikely to become an imperialist power. The authors underline the predominance of SOEs and state-controlled financial institutions in China’s outward investments, which primarily aim to achieve the Party’s political goals. They argue that these investments serve international cooperation based on mutual interests, rather than being instruments of domination.[74]
The problem is that these authors seem to position the state and the economy in China as two ontologically separate realms, treat the CPC as a subject that oversees social interests above all economic actors, and attribute the structural problems inherent in capitalism solely to China’s private capital. This theorization cannot be justified by referring to ‘relative autonomy’ in the Marxist sense. According to Marx, state power, no matter how independent it may seem, is ultimately not “suspended in the midair”; rather, it represents a social class.[75] There are exceptions to this, but they too cannot be absolute; rather they are unstable and transient at best. Such idealistic distinctions between the state and the economy are therefore more reminiscent of ‘statist-institutionalist’ approaches to the so-called ‘developmental states’ – based on the assumption of an all-powerful state that “stands above society and narrow interest groups and, especially, the capitalist class” and that “being in possession of the discretionary power to allocate financial resources, [is] able to direct and discipline enterprises so that they [will] invest in strategic sectors under a long-term developmental and industrial plan”[76] – than of Marxist analyses.
As Hsu and Ching emphasize, state ownership of the means of production and state participation in planning do not necessarily correspond to socialist relations of production and a socialist economy.[77] The state can hold legal ownership of the means of production and intervene in the economy through various instruments, both in a capitalist system and during the socialist transition. In fact, the mechanistic approach that reduces socialism to state intervention and the dominant role of SOEs in the economy reproduces in reverse the neoliberal narrative that equates capitalism with ‘state’s non-intervention’. Yet, this is nothing but an illusion. Even during the heyday of laissez-faire liberalism and ‘universal free trade’, state intervention was by no means absent. As Gramsci once noted, “laissez-faire too is a form of state ‘regulation’, introduced and maintained by legislative and coercive means”.[78] The capitalist state always ‘intervenes’ to protect the long-term interests of the capitalist class and acquires ownership as long as it serves the perpetuation and reproduction of the capitalist system. The ‘developmental states’, once known and glorified as the ‘Asian Tigers’, provide a prominent example: while these states were also characterized by extensive state intervention, export promotion, control of labor and control of capital flows, no one has ever seriously claimed that they were somehow ‘socialist’. In short, state ownership and intervention are not enough to identify socialism.
Marx stated that it was “the transformation of capitalistic private property … into socialized property” that would bring about the end of capitalism.[79] The nationalization of the means of production may be a step towards their socialization, but it is not synonymous with the transformation of ‘capitalistic private property’ into ‘socialized’ one. A key requirement of the transition to ‘socialized ownership’ is to prevent the concentration of power in the hands of a narrow group of bureaucratic and technocratic élite – that could become the nucleus of a new ruling class – by ensuring the participation of the toiling masses in decision-making and policy implementation processes at all levels, starting from the grassroots. As Engst says, no matter whether they are called “bosses” or “Party secretaries”, a small group of people who exercise their power “to control socialized production and distribution” in the interests of a “few individuals or small groups” are capitalists.[80] In other words, state ownership may also well be a sort of capitalist ownership. And if state power falls into the hands of capitalists, there can be no talk of socialism whatsoever. For this reason, the main criterion for whether a country can be considered socialist should not be whether state ownership is present or dominant, but whether state ownership is utilized to ensure the transition from ‘capitalistic private’ to ‘socialized’ ownership.[81]
During the Maoist era, and especially starting with the Cultural Revolution, China sought to transform state ownership in the means of production into ‘socialized’ ownership. Under Mao significant steps were taken to gradually eliminate commodity production, wage labor and the division between the intellectual and manual labor in state enterprises. The purpose of production was shifted from the valorization of capital to meeting the actual needs of the people. It is this direction that demonstrates the socialist character of the state in this period.[82]
Socialist enterprise management principles called the ‘Angang Constitution’ (鞍钢宪法 Angang xianfa) were proposed originally in 1960, and were put into widespread practice mainly during the Cultural Revolution, reflect this as well. These egalitarian principles, developed by the workers of the Anshan Iron and Steel Company, required the direct participation of workers in managerial decision-making, and cadres’ participation in manual labor.[83] No doubt, the Angang Constitution did not provide concrete solutions to some crucial issues such as the selection of leadership, the position of mass organizations, and the use and position of the big-character posters (大字报 dazibao).[84] Yet it would serve a basis for discussions and creative initiatives during the Cultural Revolution, when the power structure was radically reshuffled, on how to create rules and regulations to help run enterprises “without making workers the permanent inferiors of the techno-bureaucratic élite”.[85]
In the post-Mao ‘Reform and Opening-up’ years, things changed. From the 1980s to the second half of the 1990s, a series of reforms were undertaken to restructure SOEs in line with the needs of marketization. These culminated in the ‘grasp the big, release the small’ (抓大放小 zhuada fangxiao) policy under Jiang Zemin’s administration: hundreds of thousands of small- and medium-sized SOEs were privatized (leaving tens of millions of workers unemployed[86]), while large-scale SOEs in strategic sectors were not privatized, but were transformed into profit-oriented state-capitalist companies that operate according to the same principles as private ones in the market.[87] As stated explicitly in a 2013 report co-authored by the World Bank and the Development Research Center of China’s State Council, starting from the mid-1990s, “many SOEs were corporatized, radically restructured (including the shedding of labor), and expected to operate at a profit”.[88] As a result, SOEs, which became responsible for their own profits and losses, now share their profits with the state only to a very limited extent, and thus these profits cannot be redistributed for social use in society at large.[89]
It is true that, the legal ownership of these companies still belongs to the state. However, many acquaintances and relatives of former and current senior Party and state cadres have continued to hold some top-level management positions for many years, not only in the private sector but also in the SOEs.[90] The extensive anti-corruption campaigns under Xi Jinping are said to have targeted these patronage networks as well, at least to the extent that they challenge the government’s authority and undermine its legitimacy.[91] Yet it would be a mistake to treat the bourgeois right of inheritance as the sole mechanism for self-reproduction of the capitalist ruling class. The CPC’s use of China’s ‘élite universities’ as a hub for training and recruiting senior cadres, technocrats and bureaucrats, combined with the growing inequality in access to high-quality education in parallel with intensifying marketization, has also become one of the mechanisms by which the new ruling class reproduces its power.[92] It should also be noted that today the CPC (and the Chinese state) and China’s new private capitalist class are significantly intertwined. A 2012 study by the Chinese Academy of Social Sciences (CASS) found that around one-third of China’s private capitalists were already CPC members, and 40% of those outside the Party were willing to become so.[93] According to Hurun Research Institute’s 2023 ‘China Rich List’, of China’s ‘super-rich’ (1,241 individuals) with a minimum net worth of 5 billion yuan (USD 690 million), a total of 6.5% were delegates either to the Chinese People’s Political Consultative Conference (CPPCC) or to the National People’s Congress (NPC) – a typical case of over-representation, given their negligibly small proportion in the general population.[94]
Therefore it is highly problematic to argue that capital exports by China’s SOEs, let alone capital exports by private companies, are qualitatively different from those of American, European or Japanese monopolies because they are planned by the CPC, an actor independent of the capitalist class and even above all social classes. Engst argues that what he calls China’s ‘State Capital Conglomerate’, while unique, is nevertheless embedded in the capitalist-imperialist world economy, and that China’s growing capital exports, like those of other ‘great powers’, are the result of its need for capitalist expansion. According to Engst, it is the rapid rise and global expansion of SOEs rather than the development of private capitalism in China that has put Western imperialists on alert. This is because these SOEs – control of which rests in the hands of the Chinese bureaucracy – are components of a “State Capital Conglomerate”. This huge conglomerate of industrial and financial capital is extremely flexible: It can be divided domestically into semi-autonomous and even rival companies in the same sector to balance different interests within the bureaucratic capitalist class, but these companies can quickly recombine to avoid international competition when it comes to foreign investments. Engst argues that the Chinese state is not ‘relatively autonomous’ from this State Capital Conglomerate. Instead, the Conglomerate “has an absolute control of [China’s] ruling party, its state machinery, and its military” and has thus become the capital group with the highest degree of monopolistic power in the world. Apart from its economic power, China is today a politically and militarily sovereign, independent country, thanks to the legacy of socialism. This is the reason why the US, in the face of its “imperialist world hegemony”, sees China more of a threat than the economic competition of the EU or Japanese imperialists and why it is accelerating its military build-up mainly against China.[95]
Lenin once stated that “[c]olonial policies and imperialism are not unsound but curable disorders of capitalism …; they are an inevitable consequence of the very foundations of capitalism. Competition among individual enterprises inevitably leads either to their becoming ruined or ruining others; competition between individual countries confronts each of them with the alternative of falling behind, … or else ruining and conquering other countries, thus elbowing their way to a place among the ‘Great’ Powers”.[96] Capitalist China is no exception in this respect. After all, state capitalism is capitalism and the bureaucratic bourgeoisie is a bourgeoisie. The capitalist logic based on the endless accumulation of capital (“accumulation for accumulation’s sake” in Marx’s words[97]) applies everywhere, from the most advanced imperialist countries to the most backward semi-colonial and dependent capitalist nations; it thus also applies to both the private and state capitalist firms of China.
Chinese capitalism was developed on the ground laid by socialism. That is, it was developed by plundering and exploiting the resources created collectively by the popular masses at great sacrifice during the Maoist era (that is the period of socialist transition). It cannot be expected, by voluntary choice, to stay outside the trajectory pointed out by Lenin. This is a trajectory that no CPC leadership, no matter how well-intentioned or modest, can prevent if it cannot afford to radically intervene in the relations of production and distribution. But would it be possible for such a leadership to emerge from within the ranks of the current CPC?
The late Chinese Marxist writer and scholar Cao Zhenglu (1949-2021) approached this question with skepticism. To maintain the legitimacy of its rule, Cao argued, the CPC must emphasize that it is “not just a ruling party, but a revolutionary party”, claim to represent the majority of the working people and “uphold the legitimacy of revolutionary history”. But in practice, those who rule China must “say goodbye to the revolution” because “the market economy must secure the special interests of the bourgeoisie”. At this point a dilemma arises: No matter how much “labor” is glorified in rhetoric, in reality policies in favor of “capital” will be implemented.[98] This is an interpretation in line with Mao’s argument that “the rise to power of revisionism also marks the rise to power of the bourgeoisie”.[99] As an old Maoist slogan goes, the bourgeoisie may ‘hoist the red flag to counter the red flag’ (打着红旗反红旗 dazhe hongqi fan hongqi), but in the final analysis it makes and implements policies in its own long-term interests.
In recent years, as part of his ‘hegemonic project’, Xi has been selectively using some elements from China’s socialist past in order to construct a full-fledged nationalist rhetoric. These isolated elements have been seized upon by western China scholars to whip up paranoia about the ‘revival of Maoism’, with the terms ‘Maoism’ and ‘authoritarianism’ (or ‘totalitarianism’) often used interchangeably. In fact, the CPC leadership constantly reiterates its promise to give market forces a “decisive role” in the economy, and categorically rejects the Cultural Revolution as “catastrophic”.[100] Indeed, the Chinese state does everything in its power to preserve and stand for this ‘decisive role’. Further, as in the (in)famous Jasic Incident (佳士事件 Jiashi shijian), the Chinese state violently suppresses mass labor protests that tend to have a national and even international impact, and take on a political character.[101]
Deng’s claim that the market is a neutral instrument deserves to be questioned in this respect.[102] For the market in post-reform China is not merely the existence of commodities. Commodities continue to exist in all socialist societies. Post-reform China is marked by the conversion of labor power and means of production into commodities. No matter how much the rhetoric shifts to the ‘left’, the policies of China’s present rulers – who can safely be described in Maoist jargon as ‘capitalist roaders’ (走资派 zou zipai) – thus continue to serve the interests of the bourgeoisie, whether bureaucratic or private.
This leads us to the next question: is Chinese ‘market socialism’, or the so-called ‘socialism with Chinese characteristics’, already on an irreversible path towards the historical conclusion of capitalist development, i.e. imperialism? Today, this is a major topic of discussion in the Maoist (and/or ‘neo-Maoist’) milieu in China, as well as among the left around the world.
Whither China: Recent Debates in the Chinese Left
In China today, there are various groups and individuals with a positive view of the Maoist era and a critical approach to the post-Mao market-oriented reforms, to varying degrees. While Western media often refers to the so-called ‘neo-Maoists’ as an almost homogeneous group, it is an umbrella term encompassing many different, and sometimes contradictory, tendencies.
In recent years, one of the most heated debates in the ‘neo-Maoist’ circles in China has been on the class character of the Chinese state and China’s position within the capitalist-imperialist world economy. A 2017 online article categorizes the main divergent views on the character of Chinese society within the Chinese left as follows: “On the wrong track but still socialist”; “a society in transition from socialism to capitalism”; “already a capitalist society”; “an economic colony of imperialism”; “an imperialist country”; and “a semi-peripheral capitalist great power”. The author finds that there are fewer and fewer “elder comrades” arguing that China is still “a socialist society”, albeit “eroded by capitalist factors”. A major dividing line between those who accept that China is already capitalist, on the other hand, concerns “where does this capitalist country fit in the world system”.[103] Over the past years, different answers to this question have triggered polemics that have come to be known as the ‘Chinese imperialism theory’ (中帝论 Zhongdilun) debates.
Within the Chinese ‘neo-Maoist’ movement, a significant part of those who oppose the ‘Chinese imperialism theory’ agree largely with the views of Minqi Li and the World-Systems School. According to Li, China, far from being imperialist, can be considered a “semi-peripheral” country within the capitalist world system. Li argues that Lenin’s definition of imperialism refers not only to “the formation of large capitals and export of capital”, but essentially to a global system “where a small minority of the world population exploits the great majority”; thus, China’s “advance into the core of the capitalist world system” would lead to an unsustainable situation for human civilization, with the majority exploiting the minority, and the collapse of “the global ecological system”. The author acknowledges that China today, for example, has overtaken the peripheral countries in terms of per capita GDP and has established “exploitative relations against nearly half of the world population” (that is in South Asia, sub-Saharan Africa, and the low- and middle-income East Asian countries excluding China). Nevertheless, China “continues to have an exploited position in the global capitalist division of labor and transfers more surplus value to the core (historical imperialist countries) than it receives from the periphery”. This, according to Li, places China, at best, somewhere in between the core and peripheral capitalist countries.[104]
Red China Net (红色中国网 hongse Zhongguo wang) website, of which Minqi Li also an editor and a leading theorist, appears to be one of the most prominent proponents of the ‘semi-peripheral’ China argument. In an article published on Red China Net, a writer using the pseudonym ‘Guard of Jinggang Mountain’ argues that China, as a “semi-peripheral” country, imports raw materials and low-quality industrial products from the periphery, but it remains dependent on the core technologies developed by the “core” capitalist countries. According to the writer, cheap Chinese labor employed in labor-intensive sectors provides a material basis for American capitalism to maintain high profit rates and nurture a “labor aristocracy” in its own country. The Chinese bourgeoisie, on the other hand, is much weaker, more capitulationist and more factionalized than it appears. It therefore lacks the power and the will to challenge US hegemony. On the contrary, it is in a relationship of interdependence with US monopoly capital within the capitalist world system.[105]
An author writing under the name Feng Langqi (‘Wind and Waves Rise’) cites China’s official ODI data in support of this argument: Accordingly, out of China’s total stock of USD 1.81 trillion worth of ODI in 2017, 77% was invested in Hong Kong, Macao, Singapore and other “offshore financial centers and tax havens”; 14% was invested in the “imperialist or non-imperialist core countries” of Europe, North America, Oceania and Asia; while only about 9%, worth USD 160 billion, was invested in the “vast peripheral regions” of Asia, Africa and Latin America. This, according to Feng, indicates that China’s capital exports “are not imperialist, but of a distinctly semi-peripheral character”.[106]
According to an author going by the pseudonym ‘Voyage One’, the ‘Chinese imperialism theory’ instills despair and makes imperialism seem almost indestructible, as it exaggerates the strength of Chinese capital and underestimates the strength of the working class. After all, if China has already become an imperialist country and will soon even overtake US imperialism, this means “bourgeois rule” has become much more consolidated and the possibility of a “proletarian revolution” in China has diminished, as there is an inseparable link between reformism and imperialism.[107] ‘Voyage One’ argues that such a theory therefore attracts a large number of young students and intellectuals who are new to the Marxist-Leninist ranks in China and thus have limited experience of class struggle, i.e. “petite bourgeois left-wing radical” elements (小资产阶级左派激进分子 xiaozichanjieji zuopai jijin fenzi), rather than older generations of revolutionaries and experienced workers who have mostly lived through the socialist era.[108] The “absurd” equation of “imperialism = monopoly = hegemony” by the “petite bourgeois radicals” and the “intellectualist clique” (学院派 xueyuanpai) defending the ‘Chinese imperialism theory’ prevents them from seeing the genuine equation “imperialism = parasitism = decay”. The former equation is intrinsically false, because it implies that more than half the world is imperialist. If all the countries that have entered the monopolistic stage in one way or another were to fight for hegemony, ‘Voyage One’ notes, “there would have been more world wars than the World Cup”.[109]
A comprehensive study, probably prepared by the Peking University Marxism Society (北大马会 Beida mahui), which was suppressed by the government through police action following the Jasic Incident due to its close ties to the militant labor movement, provides a detailed summary of the views of ‘neo-Maoist’ circles advocating the ‘Chinese imperialism theory’. The study explains the “rise of Chinese imperialism”, especially in the post-2008 period, through the strategy adopted by China’s dominant “bureaucratic monopoly capital”, as well as “private monopoly capital” highly integrated into the bureaucratic system. The strategy was to overcome the economic crisis at home by expanding abroad. China’s commodity and capital exports have increased rapidly in recent years in line with this strategy. China, in this way, has been increasing its control over economically backward, capital-poor semi-colonial countries through the extensive infrastructure construction projects undertaken under the Belt and Road Initiative (BRI) and the international financial institutions it has established to finance these projects. According to the authors, China is now “increasingly becoming the second largest imperialist country after the US”, and this is leading to resistance from the established imperialist powers, making new imperialist wars possible.[110]
In another article advocating similar views, it is argued that China is an imperialist country “where the regime and monopoly capital are integrated at the highest level” based on the following four criteria: (1) China is a capitalist state based on private ownership of the means of production and wage labor; (2) China has created a monopolistic organization dominated by the state-owned monopolistic enterprises; (3) financial capital, led by the CPC, controls the Chinese economy; (4) China has already begun to export large amounts of capital abroad.[111]
Fred Engst (Yang Heping), some of whose views are briefly mentioned above, has also been an active participant in these polemics in China, writing under the pen names Hua Shi (‘True Talk’) and Han Liuji (‘Rapid Cold Current’).[112] Engst criticizes analyses inspired by World-Systems Theory for distorting Lenin’s theory of imperialism: by refusing to place monopoly capital directly at the center of the system, exaggerating the shared interests of the bourgeois classes of different countries (and ignoring obvious contradictions), and “concealing the hegemonic behaviors of the rising monopoly capital objectively”.[113] Those who consider China not as a new imperialist power but as a ‘semi-peripheral’ country on the ground that the Chinese labor movement has not yet been tamed by imperialist superprofits confuse “cause” and “effect”, because “superprofits are the purpose of imperialism, a consequence, not a cause”. Therefore, to regard the formation of a “labor aristocracy” nurtured by superprofits of monopoly capital as one of the basic characteristics of imperialism is nothing but putting the cart before the horse: “Imperialism is not the result of superprofits or financial hegemony, but only with imperialism can superprofits and financial hegemony be obtained”. For Engst, when it comes to imperialism, the ‘independent variable’ is nothing but monopoly capitalism. All the features of imperialism, including its “parasitic and decaying nature”, are “derived from the emergence of monopoly capital”.[114]
In a similar vein, an author using the pseudonym ‘Eastern Wind’ points out that Lenin, unlike the World-Systems theorists, defines imperialism not simply on the basis of exchange relations in the capitalist world market, but mainly in the context of “the characteristics of the relations of production”. The author states that according to Lenin’s definition, the basic criteria for a country to be considered imperialist should be: (a) capitalism in that country has reached the monopoly stage, and monopoly capital occupies a dominant position in the national economy, and (b) the monopoly capital of that country has started to carry out large-scale capital exports and compete for the world market. He/she concludes that “judging by these two criteria, China is an imperialist country through and through (不折不扣 buzhe-bukou)”.[115]
A Few Brief Remarks
Keeping in mind the different approaches mentioned above, a few critical remarks can be ventured:
Some authors explain China’s emergence as a net capital exporter primarily on the basis of the CPC’s political motivations, citing the dominant role played by SOEs in China’s overseas direct investment, and frame this argument by posing a dichotomy between China’s ‘capitalist economy’ and its ‘non-capitalist state’. However, this interpretation does not seem to be compatible with the ‘materialist conception of history’.
China’s GDP growth rate hovered around double-digit levels for many years till the 2008 Global Financial Crisis. With the contraction in global trade volume following the crisis, China’s export-oriented growth model adopted during the ‘Reform and Opening-up’ period hit a roadblock, leading to a sharp decline in its GDP growth rates. The CPC attempted to overcome this roadblock with massive infrastructure and construction investments, financed through the state-controlled banking sector. But far from halting the decline in the country’s growth rates, this has led to increased debt and created serious overcapacity problems in some key sectors. As a result, China has turned to developing large-scale capital export projects, notably the BRI, using the capital it accumulated over the years as the ‘world’s factory’.[116] In other words, the main reason for the rapid increase in China’s outward investment in recent years is not some political goals set by the ‘non-capitalist state’ that are independent of the functioning logic of the ‘capitalist economy’ – for instance, ‘South-South cooperation’ – but China’s need to continue its capitalist expansion. Placing the ‘going out’ (走出去 zou chuqu) strategy it developed in the early 2000s at the very heart of its capital accumulation model, the Chinese government has been making massive infrastructure investments in underdeveloped countries, and thereby seeking to secure permanent access for Chinese capital to the markets and natural resources of these countries.
As noted above, some authors particularly underline that China’s ODI stock in underdeveloped countries is proportionally low, while that in Hong Kong and in tax havens is very high.[117] Indeed, official data on China’s current ODI stock is inflated by “offshoring” and “round-tripping” operations of Chinese firms.[118] Nevertheless, this should not obscure the fact that China’s outward investments, especially on BRI corridors, have increased rapidly and significantly in recent years.[119] By 2018, China was already among the top five investors in many developing countries in Asia and Africa.[120]
Again, as briefly mentioned above, one of the sub-topics that often comes up in discussions on China’s position in the capitalist-imperialist world economy is the question of the ‘labor aristocracy’. Lenin wrote that imperialism “has the tendency to create privileged workers, and to detach them from the broad masses of the proletariat”.[121] In imperialist countries, the creation of a “stratum of bourgeoisified workers” or a “labor aristocracy” who are “quite philistine in their mode of life, in the size of their earnings and in their entire outlook” is made possible by the “enormous superprofits” that a handful of wealthy and powerful states obtain by plundering the whole world.[122]
According to the International Labor Organization (ILO), “real wage growth among all G20 countries between 2008 and 2022 was highest in China, where real monthly wages in 2022 were equivalent to about 2.6 times their real value in 2008”.[123] Yet, in terms of living and working conditions, the Chinese working class still lags far behind the working classes of the high-income advanced capitalist countries. While it is not on its own a sufficient indicator to draw any meaningful conclusions, China’s nationwide per capita disposable income was still only around USD 5,500 for the year 2023,[124] far below that of the advanced capitalist countries. In 2020, then-Premier Li Keqiang made a high-profile statement that China was still “a developing country with a big population” and that the monthly income of some 600 million Chinese (that is more than 40% of the population) was barely RMB 1,000 (USD 141), which was “not even enough to rent a room in a medium Chinese city”.[125] Li’s statement also revealed that the Chinese government has not been able to boost domestic consumption as fast as it would like as a part of its new economic strategy.
In this regard, the chronic income and wealth inequality is one of the most challenging problems for the CPC. Between 2010 and 2021, among both urban and rural households, annual per capita disposable income of the poorest 20% increased only marginally, while that of the richest 20% increased very significantly.[126] As the World Inequality Report 2022 points out, while China was a very egalitarian society, at least in terms of income distribution, when the market-oriented transformation began, today the shares of total income of the poorest 50% and the richest 1% are almost equal. Turning to wealth distribution, the richest 1 % own 30.5% of the wealth, and the richest 10% own 67.8%, while the poorest 50% own only 6.4%. Thus the top 1% own five times the total wealth of the bottom half of the population.[127] Moreover, although China is a rapidly proletarianizing and urbanizing country,[128] it still has a huge population of “peasant-workers” (农民工 nongmingong) numbering nearly 300 million according to official statistics.[129] These mostly work in labor-intensive, low-paid jobs with little or no benefits, outside the place of their household registration (户口 hukou), often in precarious and poor conditions.[130]
Therefore, in China today, unlike in the countries of the dominant imperialist bloc, there is no significant ‘labor aristocracy’ that has been tamed by a share of the superprofits of monopoly capital. China, which is home to approximately 780 million of the world’s total labor force of 3.63 billion, has a huge labor force.[131] In order to create “the labor lieutenants of the capitalist class”[132] in this country, an enormous amount of international exploitation and monopoly profits would be needed. Yet global capitalism seems to have already reached its spatial and ecological limits. Lauesen argues that capitalism is facing an intertwined “triple crisis”: the rapid exhaustion of “new peripheries” that can be incorporated into the capitalist system to perpetuate capital accumulation leads to an economic crisis; the environmental destruction and climate change caused by current global production and consumption practices lead to an ecological crisis; and the split within the bourgeoisie between the fraction that “wish to continue with neoliberal globalization” and the “paleo-conservative” fraction that “want to return to a nation-based accumulation of capital” leads to a political crisis.[133]
As noted above, over the past four decades or so, China’s ‘relinking’ with the capitalist world economy and the opening up of national markets in many developing countries to unrestricted exploitation by imperialist monopolies through so-called neoliberal ‘restructuring’ provided a temporary lifeline to the capitalist-imperialist world economy, which was struggling in a serious structural crisis. However, there is no other ‘China’ on earth that the advanced capitalist countries and Chinese capital need to alleviate the crisis today. That is to say, there is no other huge and almost-untouched market with relatively advanced industrial infrastructure and a skilled and healthy workforce promising a great potential for monopoly capitalist corporations as well as rapidly emerging local capitalist firms, both public and private.
One last point: Lenin defines imperialism as “a fierce struggle of the Great Powers for the division and redivision of the world”.[134] As China’s outward investments grew rapidly between 2010 and 2019, its military spending more than doubled, although it remained stable as a proportion of its GDP.[135] Although China ranks second in the world after the US in this regard, the US’s annual military expenditure is still almost three times that of China.[136] Under Xi, the pace and scope of the military modernization program has accelerated more than ever; yet the Chinese military still has serious shortcomings compared to the US military in “military technology, combat capabilities, overseas reach and military alliance networks, among other things”.[137]
Nevertheless, in the discourse of American militarism, the ‘China threat’ has become the primary excuse for the US’s bloated military budget and aggressive foreign policy. US official reports suggest that a potential increase in the Chinese military’s global influence and overseas reach could disrupt American military activities and provide China flexibility to support “offensive operations” against the US.[138] They argue that the US should take steps to fortify the international order established after the World War II, contain and deter China, support “those in China who seek freedom”, and “educate” the US’s own citizens about “the scope and implications of the China challenge”.[139]
Siddique writes that the accusation of a military threat against China seems “severely overblown”. He notes that as of early 2021, China had only one overseas military base in Djibouti, while the US had more than 800 overseas military bases around the world and 29 in Africa alone.[140] Tseng-Putterman similarly remarks that to speak of “competing imperialisms” in the Asia-Pacific region “is to conflate the unprecedented hegemony of a US empire with 375,000 Indo-Pacific Command personnel scattered across hundreds of military bases with China’s relatively modest and strictly domestic-based military modernization”.[141]
It is certainly possible to find traces of ‘big-state chauvinism’ in the discourse adopted by China, especially in border disputes and nationalist conflicts with its neighbors. It is also true that there is a positive correlation between China’s capital exports and the increase in its military capacity. But all this can only explain to a limited extent the background of the contradictions between China and the dominant imperialist bloc led by the US. Rather, Gao’s explanation is more convincing, namely, that “to justify aggressiveness against China one has to construct an aggressive China”. It is the US that is stoking tensions between China and its neighbors. It is the US “that has maintained military bases and assets with nuclear strike capacity within range of Chinese civilian centers”, and that has initiated a plan to shift 60% of its naval and aerial units to the Asia-Pacific region to encircle China.[142]
Conclusion
The 75-year adventure of the People’s Republic is in many respects a unique example in the imperialist stage of capitalism. In a relatively short period of time, a backward, poor and oppressed nation has become a politically, economically, militarily and technologically independent, sovereign capitalist state. This, no matter how one looks at it, is a remarkable progress. Ironically, however, at the base of this progress lies the legacy of its socialist period.
“The capitalists divide the world”, Lenin wrote, “not out of any particular malice, but because the degree of concentration which has been reached forces them to adopt this method in order to obtain profits”.[143] As long as China continues its capitalist expansion, it has to participate in this ‘division’ in one way or another. This is a tendency that cannot be voluntarily avoided. As such, ‘imperialism’ may be a compulsion for China to continue on its current development path. The very logic of capitalist accumulation requires the Chinese ‘State Capital Conglomerate’ to take this course. However, there are important obstacles to such a course, and a number of domestic and international factors will determine whether ‘capitalist expansion with Chinese characteristics’ can actually be carried to its logical conclusion.
Obviously, the countries of the dominant imperialist bloc, especially the US, do not want to concede a share to, and lose their privileged position to, this new and giant actor. One has only to look at the intensity of the military, economic and ideological siege targeting China – generally backed by an overtly racist rhetoric – to realize that the old and dominant imperialists will do everything in their power to prevent China from realizing its potential. Categorically and unequivocally opposing ‘China-bashing’, which is inciting nationalist delirium against the Chinese people as a whole and stoking anti-communist sentiments in the West, as well as opposing the aggression against China by the countries of the dominant imperialist bloc, is an internationalist task. It certainly does not mean defending the reactionary class interests of China’s capitalists. That is, while resolutely opposing the relations of exploitation and oppression practised by Chinese capitalism in and outside China, utmost care must be taken not to merge and compromise with the anti-China narrative and propaganda of the dominant imperialist bloc. The political line of the working class and the oppressed must be constructed on a global scale, independent of the interests of both the US-led ‘Triad’ imperialists – who are evidently the main source of war and instability in the world today – and Chinese capitalism with its ‘socialist’ façade.
Mao once said if the imperialists “insist on launching a third world war” it is “likely that the whole structure of imperialism will completely collapse”.[144] Today, the world appears to be rapidly drifting towards a new war of division. In previous wars, China was only a target. In the new war, it will probably be both a target and a party. Still, it should always be kept in mind that the assessment of a possible war’s character cannot be made solely on the basis of a checklist of China’s characteristics. Rather, it must also include the places of China and all other prospective belligerents in the economic and political relations of the world as a whole. As Lenin pointed out in his preface to the French and German editions of Imperialism: The Highest Stage of Capitalism, since “it is always possible to select any number of examples or separate data to prove any proposition”, “the whole of the data concerning the basis of economic life in all the belligerent countries and the whole world” should be taken into account in order to analyze “the objective position of the ruling classes in all the belligerent countries” and thus to assess the “true social” or “true class character” of a war.[145] Analyses based on selective data can easily lead political subjects to take erroneous and, more importantly, irreversible positions in turbulent times.
Great upheavals do not spontaneously lead to the emergence of progressive and revolutionary alternatives. In order for an imperialist war to lead to the kind of transformation that Mao pointed out, disciplined but flexible, combative but judicious organizations are needed on the faultlines of the capitalist system. Such was the role played by the Bolshevik Party and the CPC in past World Wars. In the absence of such forces to intervene in the crisis and transform it, these developments (the rise of China within the capitalist-imperialist world economy, and the harsh, provocative, brutal reaction of the dominant imperialist bloc to it) may have devastating consequences both for humanity and nature. So, how can this tension and possible armed conflict be turned in favor of the working classes and oppressed masses? Apparently, this is one of the most important questions that those who aim for a classless society and a world without exploitation are, and must be, seeking to answer today.
Onurcan Ülker studied political science and China studies in Ankara and Beijing. He has been living in a small town in Turkey and doing both mental and manual work. He supports every right of the Palestinians to resist the genocidal war imposed on them and firmly believes that one day, from the river to the sea, Palestine will be free. He would like to thank Rajani X. Desai and RUPE team for their careful reading, insightful comments and valuable contributions to the draft version of this paper. Any mistakes and omissions in the piece are the author’s own. For comments, criticisms and suggestions, please contact him at [email protected]
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Originally published in RUPE India
